CAPE TOWN – Finance Minister Tito Mboweni on Wednesday said that there would be an expected revenue shortfall of R24.7 billion in 2019/20 and R33bn in 2020/21, relative to the 2018 Budget.
"We recognise that this has hurt the cash flow of a number of companies, including small businesses," said Mboweni.
Mboweni has called on the private sector to increase its role in assisting the government with the better implementation of its existing infrastructure plans.
Mboweni said an increased investment in social and economic infrastructure will be a focus of the government's economic recovery over the medium term.
"Too many projects are poorly prepared. Too often, the government spends money on infrastructure when it could be better and more effectively done by the private sector," Mboweni said.
According to SME-funder Retail Capital chief executive Karl Westvig, it has been a trying year for small businesses across the country.
"Today's MTBPS is largely geared to government departments and allocation of spending and has not applied sufficient support to the SME sector which is a large driver of employment and GDP growth. Given the size of the economy, an R1.4bn investment from the CEO Initiative’s SME Fund in SME's is very small and will have limited real impact.
"Treasury should be committing more capital to support the private sector business funders who have access to these SME's and have the technology to deliver more efficiently and effectively. Many of the non-bank lenders have innovative models to support them but require larger balance sheets to have more impact. The government could fill the role as guarantor for them," said Westvig.